Three pending oil and gas projects propose building 760 wells in the Cat Canyon area east of Santa Maria, while Freeport-McMoRan may decommission three of its offshore oil platforms, the Santa Barbara County Board of Supervisors heard in a report from Energy Division staff on Tuesday.
John Zorovich, deputy director of the Energy, Minerals & Compliance Division, went through inspection results and operation status for onshore and offshore oil and gas production in the county.
Notably, hundreds of violations were given in recent years to one operator, HVI Cat Canyon, Inc., better known as Greka Oil and Gas.
Federal agents from the U.S. Environmental Protection Agency served warrants at the facility in December but haven’t disclosed details of the investigation.
Operations of several offshore oil platforms (and corresponding onshore processing facilities) have been affected by the 2015 Refugio Oil Spill and subsequent pipeline shutdowns, since companies relied on the Plains All American Pipeline system to transport oil to refineries.
Zorovich said Tuesday that Freeport-McMoRan may intend to stop operating its Point Arguello Unit, which includes Platforms Hidalgo, Harvest and Hermosa west of Point Conception.
“Currently, that project is also shut in, and as a result Freeport-McMoRan the operator has contacted staff and they have indicated to staff that they are planning to shut down and decommission both the offshore platforms as well as the onshore facility,” Zorovich said.
The company has not submitted an application to do so, but indicated it would do so in late 2019 or early 2020, he said.
Freeport-McMoran’s Platform Irene and nearby Lompoc Oil & Gas Plant are operating and not affected by the shutdown of Plains pipelines, he added.
Venoco has declared bankruptcy and ceased operations, and the State Lands Commission is handling the abandonment of Platform Holly and piers with wells in the Goleta area.
Work on the piers should start next week, Zorovich said, and the Lands Commission plans to plug and abandon one or two of Platform Holly’s 30 wells every month.
The “fluid” from those wells will be sent to the Ellwood Onshore Facility and then trucked away, he said.
Plains’ Line 901, which ruptured causing the 2015 oil spill, and connecting Line 903, which carried crude oil northeast to Kern County, are both shut down. The company, which has been convicted of spill-related charges, has filed an application to build a replacement pipeline.
On Tuesday, the Board of Supervisors approved a $1.1 million contract for environmental review work on Plains’ proposed 123-mile replacement pipeline system, with Ecology & Environment, Inc. and MRS Environmental.
Exxon, which has three offshore platforms — Heritage, Harmony and Hondo — and the Las Flores Canyon processing facility has a pending application to truck oil to refineries until Plains transportation pipelines become available again.
Environmental review documents for that application will be released for public review next month, Zorovich told the supervisors.
Three onshore oil and gas projects are going through the environmental review process for development in the Cat Canyon area: AERA proposes 296 new wells, ERG Resources wants to drill 233 new wells, and PetroRock proposes 231 new wells, according to the county.
The ERG Resources project will be reviewed by the county Planning Commission on March 13, and the AERA project will go before the commission this summer, Zorovich said.
The county’s Office of Emergency Management is working on an updated oil spill contingency plan, and the supervisors asked staff and agency representatives about liability for abandoned oil infrastructure, for example if a company goes bankrupt and does not plug its wells.
State regulations allow it to go back to previous operators, as far back as Jan. 1, 1996, to look for remediation funding, said a representative from California’s Department of Conservation, Division of Oil, Gas and Geothermal Resources (DOGGR).
Pat Abel, from the Coastal District of DOGGR, said the state can also access performance bonds to defray some costs of plugging and abandoning wells, or other remediation.
The Lands Commission is looking at tens of millions of dollars in costs to decommission wells and plug long-abandoned wells along the county’s coast.
A state report says the Lands Commission is spending more than $1 million per month to operate Platform Holly and the onshore facility so Exxon — the previous owner of the Venoco assets — can plug the platform wells.
The state has a $22 million bond with Venoco, but cost estimates to decommission the offshore infrastructure are as high as $120 million, the Lands Commission staff said in 2017.
— Noozhawk managing editor Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.